International Marketing

What is International Marketing?? Process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations (making one or more marketing mix decisions across borders.

International Vs. Domestic Similarities Both successes depends on satisfying the basic needs of customers. Finding out what the buyers want and meeting their needs Necessary to build goodwill in both. Research and development for product development/modification necessary for both

Differences Sovereign Political Entities (Tariffs, customs duties, quantitative restrictions, regulations) Different Legal system Cultural differences (Language, Religion etc) Different Monetary Systems : exchange value/rates Differences in Marketing infrastructure: availability of marketing facilities varies Trade restrictions: import control, quotas. Transportation cost : major expense in IM Degree of Risk: large volume/value transactions, longer time period, more time of transit, longer credit period, exchange fluctuations

Why Transition from Domestic to International Market (Pre-export beh & Motivation to Export) Pre-Export Behaviour Motivation to Export (Economic Reasons) Firm characteristics (pdt, size/growth or Relative Profitability (IM maybe higher than domestic market) & potential of export domestic sales) market Insufficiency of Domestic Demand Government stimulation (incentives) Reducing Business Risks: diversify risk with Internal driven: higher profits/growth selling in a number of markets objectives Legal Restrictions: Gov impose restrictions on further growth/capacity expansion of some firms within domestic market in order to achieve certain social objectives Exporting to attain status and prestige To meet increased costs of R&D, larger markets is needed and export unavoidable Tech improvement: pick up new ideas, usage, improvement and new applications

SPECIAL DIFFICULTIES IN INTERNATIONAL MARKETING There are a number of difficulties in undertaking international business. Some of them the special difficulties are as follows: Quantitative restrictions to protect local industries. Government regulations restricting imports by way of import licenses, etc. Exchange controls. Local taxes like sales taxes on imported goods. Different monetary systems like Dollars in USA, Sterling in UK, YEN in Japan. Different legal system regarding import and export of goods. Differences in procedures and documentation. Differences in market characteristics. Lower mobility of factors of production. Cultural dimensions of international marketing. Economic Unions. Trade barriers - Tariff and non tariff barriers. Lack of export incentives to exporters. Lack of adequate export financing especially for small scale industries. Complications of Exporting. Paper work is more in export business. Competition from local exporters, competition from exporters from other countries and competition from producers of goods in the importing countries. Shipping and freight problems. Non-availability of latest information about the market conditions, etc.